AI spending could surpass defense spending… Stocks for the next phase of the boom… The U.S.-China fight… What Trump said today about it… A good market mood… What retirees should do now…
A note for historians...
Today, we're sharing another first in the AI boom...
By next year, corporate spending on AI infrastructure could surpass U.S. national defense spending for the first time. That's what Morgan Stanley analysts are expecting.
The firm says annual AI capital expenditure ("capex") growth from the likes of Alphabet (GOOGL), Amazon (AMZN), Meta Platforms (META), Microsoft (MSFT), and Oracle (ORCL) should rise to around 3.2% of U.S. GDP in 2027.
For comparison, national defense is expected to be around 2.7% of GDP this year, while AI capex accounts for 2.5%, with those five "hyperscalers" we just mentioned surpassing $800 billion in spending on AI-related projects alone.
As Stansberry Research senior analyst Brett Eversole wrote in his True Wealth newsletter last month...
The U.S. already has more than 4,000 data centers in operation. About 3,000 more are either planned or under construction.
We've seen more than $1 trillion in spending over the past few years... and this build-out is far from complete. Goldman Sachs estimates that AI capex spending will top $1 trillion next year alone. And it'll keep growing. Take a look...
This building boom is like nothing we've ever seen before. According to these estimates, data-center spending could reach nearly $7 trillion over the next five years.
As we've noted before, these companies are increasingly turning to debt to finance this spending. But the market doesn't seem to care all that much – yet. (Similarly, Mr. Market doesn't seem concerned that interest on the national debt is already greater than defense spending.) After four-plus years, there's no sign of a let-up in the AI-fueled bull market we're seeing.
Stocks for the next phase...
I (Corey McLaughlin) wrote last week about Brett's "Phase 2" thesis of the AI bull market. In short, as Brett wrote...
We've lived in "Phase 1" for years. That phase was all about building the infrastructure and models needed for the AI boom. Now, Phase 2 is underway... And it's all about selling.
In last month's True Wealth issue, Brett detailed a brand-new recommendation to take advantage of Phase 2.
If you haven't read Brett's monthly issue yet, be sure to. It provides a great framework for how to think about where the AI boom has already been and where it could go from here. Existing True Wealth and Stansberry Alliance members can find it here.
Similarly, our friend Joel Litman at our corporate affiliate Altimetry (whom you heard from in our Masters Series yesterday), also says the next phase of the AI bull market is about to get going... and three market catalysts are set to converge later this week to spark it.
As Joel explains in a new free presentation he put together with Landon Swan from our corporate affiliate InvestorPlace, it has to do with the ongoing fight for AI dominance between the U.S. and China.
This fight isn't going away...
Today, President Donald Trump brought up the competition during an Oval Office press conference about the launch of "Trump accounts" for minors. On AI and cryptocurrencies, Trump said, "If we didn't do it, China would do it."
Joel and Landon say Trump's push to win the AI race could trigger a $23 trillion boom in a specific corner of the AI sector. In their presentation, they also detail five little-known stocks that could soar hundreds – or even thousands – of percent in the next 12 months as this trend unfolds.
If you missed the debut of the presentation last week, you can check out a replay here. Just for tuning in, you'll hear a free stock pick. This event is only online until Thursday, so don't wait.
As for today...
The benchmark S&P 500 Index was higher by nearly 1%, as tech stocks had another strong day. The sector was up nearly 2%, and individual semiconductor and AI-related stocks were up even more.
The Magnificent Seven stocks also appear to have stabilized. They were up another 2% or so on an equally weighted basis. The Roundhill Magnificent Seven Fund (MAGS) is trading above its 200-day moving average.
Today's action leaned tech-heavy, but the equally weighted S&P 500 was also up slightly and traded near an all-time high.
Oil futures edged lower, as we may have entered the "no news is good news" part of the war in Iran. Brent crude's September contract is around $72 per barrel, and West Texas Intermediate's August contract is trading below $69.
Bonds barely budged, too. Either everyone's brains are still at the beach or pool, or the market mood really is just that good right now.
What Retirees Should Do Now
Retirement is supposed to be simple. Work hard... save money... build a nest egg... and enjoy the rest of your life. But for millions of Americans, retirement feels more uncertain than ever...
The cost of living keeps rising. Healthcare expenses are climbing. And Social Security faces an uncertain future. So the real question is: How do you make sure you don't outlive your money? And just as importantly... How do you make sure you actually enjoy retirement once you get there?
In a recent episode of our weekly Top Stocks show, Director of Research Matt Weinschenk sat down with Retirement Millionaire editor and MarketWise CEO Dr. David "Doc" Eifrig to talk about these questions...
They break down the biggest retirement mistakes people make... Why purpose matters as much as wealth... How to think about Social Security... And the simple decisions that could add hundreds of thousands of dollars to your retirement over time.
Watch the episode for free here, and you can learn more from Doc about his "retirement blueprint" at Retirement2026.com.
New 52-week highs (as of 7/2/26): AbbVie (ABBV), Altius Minerals (ALS.TO), Air Products and Chemicals (APD), Alpha Architect 1-3 Month Box Fund (BOXX), Chemed (CHE), Canadian National Railway (CNI), Healthpeak Properties (DOC), Equity Residential (EQR), iShares MSCI Spain Fund (EWP), Coca-Cola (KO), Omega Healthcare Investors (OHI), Public Storage (PSA), Snap-on (SNA), State Street SPDR Portfolio S&P 500 Value Fund (SPYV), Travelers (TRV), Union Pacific (UNP), Visa (V), and State Street Health Care Select Sector SPDR Fund (XLV).
A quiet mailbag today. Welcome back from the long holiday weekend. We hope you enjoyed it. I did, returning home with the family to my native south shore of Long Island, where plenty of fireworks (and lightning) lasted long into the night... How'd you spend the Fourth? As always, send your comments and questions to feedback@stansberryresearch.com.
All the best,
Corey McLaughlin
Baltimore, Maryland
July 6, 2026
